By Aviva Okeson-Haberman, Madison Fleck, Yanran Huang and Johannah Grenaway
Charity care spending is still a burden for states that didn’t expand Medicaid
A ruptured aneurysm—those are the words Ed Weisbart, chair of the Missouri Physicians for a National Health Program, uses to describe the United States program of charity care.
“The biggest point is that it's not a solution, and it's an embarrassment,” Weisbart said. “It's incredibly necessary today, but it's no more than a Band-Aid.”
Charity care — emergency, urgent or medically necessary care provided at free or reduced cost to patients — has increased around 469 percent in Missouri from 2004 to 2014, according the Missouri Hospital Association. Charity care is an indicator of a larger problem within the health care system. While the Affordable Care Act has started to address this issue, it has also created new challenges for states like Missouri that have not expanded Medicaid.
Missouri Hospital Association spokesman Dave Dillon says even people who don’t rely on charity care should still be concerned because the costs get passed on to everyone.
“That money doesn’t come from bake sales,” Dillon said. “It comes from shifting costs to people who have insurers or pay out-of-pocket, and they pay more to support the cost of providing care to individuals who don’t have insurance”
It’s a system that doesn’t work for patients either, according to Weisbart. He said this is because low-income patients often wait until an emergency to access care.
“It's not uncommon to see an asthmatic in the office with trouble breathing, and the only choice they have is to go to an emergency room where they can't be turned away and they get a temporary breathing treatment,” Weisbart said.
Former President Barack Obama hoped to address situations like these when he signed the Affordable Care Act. Obama wanted to increase the number of people who have insurance by expanding Medicaid, creating health care exchanges and instituting a penalty for not having insurance. This would, in turn, decrease charity care spending by hospitals because a higher number of insured people would mean fewer people would need financial assistance.
To some extent, this was the case in Missouri. As a result of the decrease in the uninsured rate, Missouri hospitals spent 11 percent less on charity care from 2014 to 2015.
However, the ACA was not implemented as originally intended. The 2012 Supreme Court decision resulted in states having the power to decide if they wanted to expand Medicaid. Missouri opted not 0
According to a report by the Urban Institute, Missouri had a 25 percent decrease in the uninsured rate from 2010 to 2015 while the average for states that expanded Medicaid was a 45 percent decrease.
The ACA was written with the assumption that all states would expand Medicaid. As a result, the act included a decrease in funding to hospitals for things like charity care because with more insured people, there would be less of a need.
Under current law, Missouri would have a 19 percent reduction in the amount of money the federal government gives hospitals for uncompensated care through a program called the Medicaid Disproportionate Share Hospital payments, according to The Medicaid and CHIP Payment and Access Commission.
These reductions have been delayed several times. However, federal Disproportionate Share Hospital payments are scheduled to be reduced by $2 billion in the 2018 fiscal year, according to The Medicaid and CHIP Payment and Access Commission.
The problem is that Missouri hasn’t had as much of a decrease in charity care compared to states that expanded Medicaid. This leaves hospitals like Capital Region Medical Center in Jefferson City in a tough situation.
“We’ll have to look at our bottom line and figure out how we're going to make up that difference,” DebraFroebel, director of revenue cycle at Capital Regional Medical Center, said.“It's about a two million dollars bottom line difference to this hospital.”
Dillon said whatever happens with the payments won’t change the mission of hospitals.
“There will always be people, even if the Affordable Care Act was fully implemented, who fall through the cracks of coverage,” Dillon said. “We’ll still have the mission to provide them care.”